Latin America and the Caribbean prepare for first meeting to design Green Climate Fund

Following delays parties to the UNFCCC have now selected the members of the Transitional Committee responsible for designing the Green Climate Fund (GCF). The Transitional Committee will hold its first meeting in Mexico City later this month.

The GCF is one of the few solid, yet customarily ambiguous, outcomes of the COP16 negotiations last year, with the mandate to deliver financing for mitigation and adaptation in developing countries.

The Transitional Committee was meant to have its first meeting in March but due to delays in selecting representatives from the Latin America and Caribbean (LAC) and Asian regions, the meeting was shelved until late April. With 14 countries vying for 7 seats the selection process was a highly politicized affair as countries fought to ensure they have a voice on how the Fund is designed. Judging by the list below there is also a real mix of expertise.

The members from Latin America and the Caribbean of the Transitional Committee are:

1. Carlos Gerardo Acevedo, President of the Central Reserve Bank of El Salvador

2. Ernesto Cordero Arroyo, Minister of Finance and Public Credit of Mexico

3. Vanesa Valeria D’Elia, Advisor to the Minister of Economy and Public Finances on Climate Change issues, Argentina

4. Javier Roca Fabian, Ministry of Economy and Finance, Peru

5. Audrey Joy Grant, Ambassador of Belize to Belgium and the European Community, Belize

6. Paul Oquist Kelley, Minister and Private Secretary for National Policies, Presidency of the Republic of Nicaragua

*It’s worth noting that Derek Gibb, Barbados, is representing the Small Island Developing States alongside Samoa.

In Cancun, the Guatemalan President Alvaro Colom emphasized Latin America and the Caribbean’s vulnerability to climate change stating that “Without agreement we are burying the dead in every river,” referring to a recent surge in floods across the region.

Few disagree that LAC is particularly vulnerable to the impacts of climate change. However, the Cancun text on finance clearly states that “funding for adaptation will be prioritized for the most vulnerable developing countries, such as the least developed countries, Small Island Developing States and Africa.”

From LAC, only Haiti ranks among the least developed countries. This puts LAC countries in a difficult position as Monica Araya argues here. These countries have a very difficult balancing act as they attempt to make their case for receiving adaptation finance without damaging relations with those countries that regard themselves as first in line for any funding.

Climate finance is unquestionably a highly volatile and divisive issue within the negotiations. To avoid holding up the process further, the 14 LAC countries attempting to get onto the Transitional Committee agreed to pair up.

Therefore each selected country from the region will have one of the other seven countries accompanying it to the meeting. For example Guyana is partnered with Belize, Costa Rica with Brazil, and so on. These partner countries will coordinate with the official country as part of the internal deal to break the logjam.

Whether this arrangement can support the region to speak more effectively and promote the interests of those on the sidelines will become apparent after the meeting.

There is a risk that accusations and recriminations will hamper the progress in the design stage of the GCF. The category system used by the UNFCCC mentioned above could cause some hiccups.

Apart from the disagreements in defining vulnerability, recent research estimates that in 2007-8 three-quarters of the world’s approximately 1.3bn poor people live in middle-income countries and only about a quarter of the world’s poor live in the remaining 39 low-income countries.

For those middle income countries such as Pakistan and India this makes the system for the potential distribution of funds look unfairly stacked against them. Countries in LAC might also add that they may have made significant progress on poverty reduction but inequality is still a pervasive issue.

Regardless of whether LAC countries are able to secure adaptation finance through the GCF, urgent conversations within national governments are required on alternative means of funding. With LAC economic growth at a respectable level for 2011 there is clearly cash available. Whether these rents are being saved for a rainy day is unclear.

Focusing solely on external financing options is clearly not a watertight strategy. As Hilary Clinton remarked last year widespread tax evasion in Latin America is denying governments vital funds. In an unfair world where international promises are habitually broken, LAC countries would do well to also consider existing domestic opportunities for climate finance.

Note:

The April 28 and 29 meeting of the Transitional Committee in Mexico City will be open to observers and the proceedings will be web cast on the UNFCCC website.